Since money is so fungible and my government is giving my SS money to BofA and other banks, how about I put $90K on my BofA and other cards and not pay it back? Since it is my SS money which will be valueless by the time I get it back 20 years from now or probably not at all, how about I extract it now from the unsecured credit cards I have and use it at today's value since money is so fungible? Sort of like this guy. YouTube - I'M BACK
So after they pay back their TARP, then pay out some nice bonuses to that awesome talent they just must retain, what happens when they come back for more TARP in the future ?
To be fair, the AIG gentleman at the end of the bar had the bartender put an upside down shot glass in front on the gentleman from Goldman via CDS settlements.
Jonny Lee, ZH best post of the day was the FDIC CRE loan portfolios getting shoveled out at a deep dicscount. The question rermains, will these early adopters of bond packages be shown to be fools for not waiting for uncle sugar to socialize more losses?
I don't get rich's PoV when it comes to physical PMs. I respect his opinions and have gained much insight from them.
However, seeng as to how much paper is moving in this market (e.g. Equities, Bonds, CDS, etc) someone somewhere needs to own actual stuff. Hence physical PM, food storage, or other means of production. Also the silver paper just gets you more paper. Can you get ETFs that would provide returns in CAD or Euros to hedge against the obvious USD risk?
I guess in some way rich may be playing the right hand just shuffling more paper, but eventually rich may have to get his hands "dirty" by actually owning some stuff.
Sigh. I sold my BAC-L position for a small loss @ $360, today it closed at $800, after dipping to $200 in March. 36% dividend yield for a preferred issue, convertible to 20 shares of BAC when the price goes over $60. Whoever owns that is set for life apparently.
What does that paper give you? Dividends? Can you exchange your ownership for part of the stash?
Rich talked about people needing physical PM to co we shorts if the market moves in the wrong direction. You catch the movement and how does the ETF earn money to pay you when you cash out? Liquidate some of it's holdings?
I may misunderstand the functioning of these funds but don't understand physical PM hostility rich was portraying either.
If the banks pay back the TARP money, what the hell are they going to use to prop up the stock market? Jeezum, do Ben and Timmy ever think this stuff through?
Ultimately I think it is more about faith and trust in the system then paper v physical.
While I can say that it makes sense on paper, I'm assuming it is going through the COMEX which I think of a fixed game that makes the stock market look fair and balanced. Also, the paper doesn't take into account currency risk which is becoming a problem for the American investor.
In the end rich may well be more right than barley, but I would think that there can be peace ofmind owning a gold coin over GLD. Just depends on how much yield you're chasing.
If no one is auditing their records, is it just blind faith thatthey have what they say they have? Is it the "find the greater fool" function that the commentariat has railed against?
Again why rant against someone wanting physical PM when the other side's position is just blind faith and trust? Is that where we are heading in this recession?
OT: I officially hate typing on an iPhone. The auto-correcting function is driving me nuts!
@squid: they are selling contracts for AG that they don't own. When they are "squeezed", they have to honor the contract when causes the spikes rich alluded to because they are buying up silver on the spot market which drives prices up (I belief I have it right. )
Many AG sellers aren't AG producers. They can be apectulators, investors, and other entities. Again a lot of it is paper/liability pushing. Taking ownership of actual PM can be frowned upon by the COMEX if blog stories I've read are true (unless you are a manufacturer)
As for Silver PM being a bad bet, we'll see. Some people probably can't afford gold or platinum and want some kind of PM in their portfolio.
I think AZ_Cowboy was referring to the rumor that's been circulating for some time that the money-center banks have been purchasing equity index futures on behalf of the Federal Reserve (since it is not allowed to own stock directly) to prop the markets.
Supposedly the rally since March has been on the back of very thin volume, little large investor participation, and driven by the most purchases of the cheapest (and worst) stocks.
If these "colluding" banks are no longer beholden to the Treasury, the hypothesis may be that they will no longer front for the Federal Reserve.
I haven't the faintest idea if there is a shred of truth in any of this. I'm just speculating about insinuations!
not quite that straightforward - it is a byproduct in many mining cases.
i think rich is fundamentally correct in terms of paper silver being a short magnet and that this is unconnected to anything which has to do with shovels - i just like gold and the pgms more
um, all of those niceties went out the window when the bear stearns deal went down...
you think that trillion-and-a-half balance sheet at the nyfed is nothing but straight treasuries printed on nicely embossed vellum?
i'm sure that timmay and friends own plenty of barely-in-the-money SPY action, and all manner of variants... and pumping up the 401Ks and IRAs of hardworking americans on the banks of nasty cave-dwelling shorts is a noble endeavor - I just shudder at the thought of the blowback
nades - rich was talking about ease of disposal, but he seemed interested because of a coming "short squeeze spike."
I cannot figure out why there would be a "short squeeze spike" in silver (as opposed to, say, orange juice futures)
Any light you can shed is appreciated. Thx
the same reason that fools like I can't resist FAZ... because it is there, and because it seems like the exceptionally weak sister in a world where business conditions matter - a perception which ironically feeds action to the upside
Well, I did some googling for "silver short squeeze" and it sounds like the typical PM ravings... Articles going back years saying "There's a silver short squeeze RIGHT NOW!! Load up now for fast profits!"
But I can't find an identifiable party that is short, or why they are/ will be in trouble because they're not hedged and filthy rich and filthy stupid or what the heck the motivation is for believing in an inevitable "short squeeze in silver"...
I explained it - silver seems like the silliest corner of the commodities play, so attracts shorts - much like homebuilders or banks attract shorts in the equities arena, because both are so obviously sitting on crap balance sheets until the cows come home...
Sorry missed the Chrysler discussion. I'm no expert in BK law but I'm a gamblin' man.
$50 tip to Hoocoodanode says the Supreme Court substantially modifies or overturns Judge Gonzalez's ruling allowing sale to Fiat.
Scalia, Roberts, Alito and Thomas will say the Gubmint is overreaching, and Breyer, Ginsburg, and Stevens will say retirees are getting screwed. Kennedy and Souter could go either way, but it won't matter.
There is no reason to restrict the reserve currency's backing to one precious metal, it can be a basket of all tangible commodities: precious, fungible, or otherwise. What if some new industrial use for glod is discovered?
one currency writes: "$50 tip to Hoocoodanode says the Supreme Court substantially modifies or overturns Judge Gonzalez's ruling allowing sale to Fiat."
this will never reach the supremes
The fix is in. The deal is done. And we been done to a turn.
"homebuilders or banks attract shorts in the equities arena, because both are so obviously sitting on crap balance sheets until the cows come home..."
I have no idea if this is sarcasm, but I'll be short until the cows come home or I go bust. Treasury yields will rise until enough are sold. The money will be printed or taxed if necessary. Easier to squeeze a bank lending long than a speculator selling short.
"However, U.S. Circuit Judge Dennis Jacobs, in announcing the ruling, said a stay of the sale order would remain in place until 4 p.m. EDT Monday or until the U.S. Supreme Court issues its own stay."
yog: I don't gamble, I'm in the advertising business.
The stay will expire 4 PM EDT Monday. Who's going to rouse one of the nine to issue a stay. One would need to find a sympathetic justice (you listed the likelys), said justice would need to tuck his night shirt into his trousers, get driven to the office and prep the necessaries.
Scalia: Prolly not. He's saving all his love for the internal friction heading his way.
Roberts: The Chief? I don't think he'll risk it.
Alito: Nice man. Would fish eye Thomas and Scalia for direction. Scalia would shrug. Thomas would look away and say something profound like "um, umm, umm"
Souter? Well, such a private man. Who really knows who he is, or what drives him... Still, the tendency of any who has risen to a pinnacle is to avoid risk. Better to go away than go away after leaving a shit on the conference table.
I don't think there will be much internal friction unless they find some Swiss account with Thomas' name, or Alito or Roberts signed off on torture (?). Kennedy and Scalia are only 72. Of course, as FDR and Spinal Tap suggested, we could go to 11.
This could be the right case for them to remind Obama and Congress there is a third branch, controlled by the opposition, and "absolute priority" has a clear meaning. It's not like they're forcing 12 year-olds to work in sweatshops for Chinese wages against the New Deal, the appellant is a pension fund.
"It was called the “Homeland Investment Act,” and was sold to Congress as a way to spur investment in America, building plants, increasing research and development and creating jobs. It gave international companies a large one-time tax break on overseas profits, but only if the money was used for specified investments in the United States.
The law specifically said the money could not be used to raise dividends or to repurchase shares.
Now the most detailed analysis of what actually happened — using confidential government data as well as corporate reports — has estimated what happened to the $299 billion companies brought back from foreign subsidiaries. About 92 percent of it went to shareholders, mostly in the form of increased share buybacks and the rest through increased dividends."
Trickle down piss.
"The study, titled “Watch What I Do, Not What I Say: The Unintended Consequences of the Homeland Investment Act,” was released this week by the National Bureau of Economic Research. It was written by Dhammika Dharmapala, a law professor at the University of Illinois; C. Fritz Foley, an associate professor of finance at Harvard Business School; and Kristin J. Forbes, a professor of economics at the Massachusetts Institute of Technology who was a member of the president’s council of economic advisers from 2003 to 2005."
...
"In lobbying for the new act in 2003, a group of companies and trade associations formed the Homeland Investment Coalition and forecast that passage would help the American economy by “increasing domestic investment in plant, equipment, R.& D. and job creation.” The title of the new study reflects its findings that none of that happened.
“The restrictions on how the money will be spent seem to have been completely ineffective,” Ms. Forbes said in an interview this week."
"The new [BAC] directors, among them ex-Federal Reserve Board Governor Susan Bies and Donald Powell, former chairman of the Federal Deposit Insurance Corp.,..."
Oh please oh please oh please why can't you take Timmy.
yog: give it up. Not gonna happen. Nobody cares, i.e. no constituency to get behind such. The internal friction referenced has to do with the nominee. I can't wait for the rumors about Scalia making plateful after plateful of tiny Latina meatballs. And NOBODY (emphasis added) will attempt to pack the court. Nobody.
ROLLINS: Lifetime guarantee?
BILL: Who's lifetime? Not mine! I haven't that much time left. Let's make it yours. Everybody's got a longer life than me!
where did that quote come from? You're not an old Black Fan are you?
Currency introduced in Germany at the end of 1923 by the president of the Reichsbank, Hjalmar Schacht (1877–1970), to replace old Reichsmarks which had been rendered worthless by inflation.
As Germany had no appreciable gold reserves, the currency was guaranteed against the assets of the country, namely land and railways. Schacht's success in stabilizing the currency was largely due to the population's willingness to trust the new Rentenmark.
In November 1923, the government issued the so-called Rentenmark. The previous currency could be exchanged at a rate of 1 trillion marks for 1 Rentenmark. Inflation quickly stopped. People spoke of the "miracle of the Rentenmark." But the truth is that it wiped out the savings and investments of large swaths of the German middle class as well as wealthy people who had been forced to finance the war by buying government bonds that had now been rendered worthless.
This is an example of an asset backed currency from history and this is what is happening here, now.
What I am saying about an asset backed dollar sounds crazy because people do not wish to believe what is staring them right in the face, screaming to be noticed.
Protect your families and your savings. This is real. This is now. Make defensive moves into land, physical PM, and foreign bank accounts. The S&P can go to 100,000. The German stock market rose from 21,400 in January to 26,890,000 in November at the peak in 1922.
Here are some graphs of the Weimar Republic runup leading to the rentenmark.
The ostriches will not catch on until after hyperinflation has already occurred. The herd is gathering and beginning to sing the same chorus, soon they will stampede.
where the heck is EHP...
if you're out there did you catch that story about Myanmar and their natural gas deals
with China and Thailand.... like I've said all along in the words of MC Hammer... 'you can't touch this!'
I have had many impassioned discussions including sending a few letters to Mitch McConnell
about the futility of trade sanctions against Myanmar... they won't work
anyone care to point me to a country where trade sanctions actually were effective? South Africa... after the Sullivan principles
US companies could keep on keepin' on ...no?
"The introduction of the Rentenmark was highly significant, it allowed the currency to stabilise and supported by the Dawes Plan it stood a good chance of not succumbing to inflationary pressures as had previously happened. The new Rentenmark was valued at 1 Rentenmark to One Trillion old marks (no typographical error there). The Rentenmark was exchangeable for bonds in land and industrial plant – in other words they were worth something. Inflation ceased to be a problem, the German people accepted the value of the new currency and businesses accepted it as being of worth."
a lot has been said about Hitler's rise to power and how he was able to turn the economy around... yet no one had talked about his bartering arrangements
bwt Germany and mainly S. American companies, in essence a barter bank was set up, bypassing the need for gold transfers....
What's striking is that Hitler's rentenmark (Edit: not hitler's rentenmark, which came later - thanks Volker) was backed by and redeemable in land and business bonds.
OH
Hitler's rentenmark was backed by and redeemable in land bonds... Hitler - I've got some bonds for you backed by and redeemable in land of the Sudetenland...
it's the fine print that will kill you...
curious legal question... if I bought such rentenmark's and they were based on occupied land would I be guilty of violating the Geneva Convention?
odd how this blog seems to be so North American centric since it deals with one of the key markets... why do I feel I'm the only one on the opposite of the dateline who is paying any attention, perhaps I should focus my energies on China and leave America well enough alone...
perhaps all the talk of RE & CRE in a very localized way is a turn for people on the other shores, no?
From Fiat Money Inflation in France, their currency was backed by land. Then they kept printing up more money. Apparently everyone's land was worth more.
for me, over the last 10 months EHP has been a great source of information, usually doing the work of any given dozen here on an
average day... so what he made a few bad forecasts... unless you are trading off his research notes? give me a few names
who have been flawless? mp and his Peter Pan make believe friend? bond crash clock? depression clock?
take Goldman Sachs, when I worked at Solly they were the only firm I would jump ship for (almost went to Drexel.... )
yet here there is a visceral hatred of that firm... aren't we supposed to be dispassionate when discussing finance and economics?
somedays I feel like I'm reading the Daily Kos.... I have a bad feeling that whereas many commentators were on the money in '07 and '08
they might now be wrong....
"The dramatic difference in the results of Germany’s two money-printing experiments was a direct result of the uses to which the money was put. Price inflation results when “demand” (money) increases more than “supply” (goods and services), driving prices up; and in the experiment of the 1930s, new money was created for the purpose of funding productivity, so supply and demand increased together and prices remained stable. Hitler said, “For every mark issued, we required the equivalent of a mark’s worth of work done, or goods produced.” In the hyperinflationary disaster of 1923, on the other hand, money was printed merely to pay off speculators, causing demand to shoot up while supply remained fixed. The result was not just inflation but hyperinflation, since the speculation went wild, triggering rampant tulip-bubble-style mania and panic. "
Duke, it is probably easier to be dispassionate from Asia. GS is robbing every man woman and child in this country. Of course those of us who are paying attention take it a little personally.
I agree about EHP. He has contributed a great deal of worthwhile information. I gave him some crap about giving government statisticians the benefit of the doubt and still feel bad about it. At least he has the guts to make specific predictions.
The jury is still out on the direction of oil and the market but I gotta say it is looking Hyper to me. Things can still crash before they go Hyper and there is a good chance of this happening.
There is no point in trying to time the optimum buy if you think Hyper is an eventuality. In this scenario, two times current prices would still be cheaper than to where they ultimately would rise.
Especially the "In the hyperinflationary disaster of 1923, on the other hand, money was printed merely to pay off speculators, causing demand to shoot up while supply remained fixed.". Exactly the same thing is happening in the USA....
I'd guess EHP is a little busy now,...he does have a life you know (and I'm guessing wife and kid.) I don't think his ego is wedded to his predictions and he'd just admit a few blown calls.
OT
How does IAU differ from GLD or are they essentially the same? Does anyone know the reason that GLD is fequently mentioned and cited by not IAU? Thank you
Hyperinflation also needs the supply side and especially the logistic system to fail at least partly. Zimbabwe: white farmers were driven off their land, resulting scarcity of food in markets and retaliation from IMF in economic terms also contributed to the hyperinflation.
Weimar: More or less chaotic situation after WWI across Germany and in neighbouring countries for years, "low intensity" street warfare between different extremists (especially between communists and nazis) happened regularly there.
We have no real historic parallel for this event.. just like there was no real historic parallel for GD1. That is one peculiar property of almost all emergent systems... the direction and nature of evolution is hard to predict.
I can give you three easy to understand examples of emergent systems.
1] Changes in the abilities of the human brain starting from birth. (think of language acquisition or locomotion.. kids don't talk a lot for almost 2-3 years and then..)
2] Biological evolution (it took almost 4 billion years to get multicellular organisms as we know them today, but much less to get further development which was unpredictable to say the least)
3] Human civilization (always increases in complexity and ability, but not linear or even predictable)
I get how you are saying there are abrupt changes but I am not sure how something you define as either evolving or dying cannot be predicted. Suddenness is relative.
Let's do some forensic accounting and have every financial firm that received AIG money pay it back before they ever pay a bonus again! All $180 billion of it!
I'm willing to bet that the list of big banks lining up to pay back the TARP is the same list as the biggest AIG recipients.
Angry Saver - the good news on the forensics is that numerals are common to the US and EU. For the accounting notes you'll need French, German, Spanish, and misc nordic languages.
Though it is small consolation, I am pleased to see multiple mentions today and yesterday of both the the WSJ using an "operating earnings" PE of 15 and of the real SP500 PE being 130 on ZH, Market Ticker, and random comments on youtube.
Imagine how hard the propaganda machines worked in 1944-45 Germany to convince the True Believers that all was well, despite all evidence to the contrary?
otishertz (profile) wrote on Sat, 6/6/2009 - 8:02 am replyIgnore userI wonder what GLD would say if I wrote them an e-mail telling them I would like to redeem some shares for gold.
They would require you to become an authorized participant and deliver some multiple of a creation unit share quantity to them. Many ETF's are created and redeemed in 50,000 share lots. You deliver 50,000 shares of the ETF to the fund and get back the equivalent value in commodities, stocks, bonds and other securities held by the fund.
There are no doubt many scams in the world of finance - Madoff, et al - ETF's aren't one of them. The structure is better on many levels than that of a regular mutual fund and has given many investors access to strategies and asset classes that previously were the domain of the wealthy.
One thing I didn't like about GLD is that it's taxable at the collectibles rate = your marginal rate. No big deal if it's in your IRA, but that means it's a suboptimal buy-and-hold vehicle.
No positions right now... all these positions I'd been building since, like December of last year, gone to a trailing stop on Wednesday. That looked wrong on Thursday, but right again on Friday. You just never know in this market... every day is an independent dice throw. Sad to see them go, some real winners in there. I moved my stops up because, just gut feel that the dollar would make a stand here, too many people leaning against it.
To me, PMs are gappy, hard to trade. You also have to be continuously aware that you're trading beside a contingent of true believers.
I'm sorta neutral on the physical vs. paper debate, have some physical, not much in dollar terms. If you're going to go that route, my experience from the 70s, when I was serious about it, is that numismatic coins with any scarcity whatsoever outperform bullion. But, yeah, anything with any scarcity is not something you will be able to monetize with a button click, perhaps only on EBay.
It's a given to me that government would outlaw ownership of PMs before it would let them become circulating currency.
I'm well aware that foreign banks received a pile of AIG dough. Barclays, Deutsch Bank and UBS all received windfalls.
I see no reason why the AIG monies should not be clawed back. We can even work out a payment schedule, with interest of course.
I might file multiple suits as a taxpayer. If nothing else it will draw attention to the sham. My worry is that the media won't cover the issue. The MSM doesn't report news anymore, only propaganda.
Angry Saver - wasn't suggesting for a moment that you weren't aware of the money trail. I wouldn't call them windfalls, however. More like everyone who was shoulder to shoulder around the roulette wheel all got paid out as part of house rules.
FAZ is a vapor-blowing game. Which, under the proper circumstances can be fun.
If you stay in for more than a day in FAS or FAS you are gambling in my book, if you stay in longer than a week or more you can't read a chart. But if I thought SLV was a good buy at 10 why not? 50% in a few months?
I agree with your point about diverting money from real buying but I think it's a side effect which TPTB are happy about and will probably 'need' to use.
Also, my experience in a couple of decades of trading... miners, for whatever reason, tend to have outsized option premia. You can often work out a good risk-reward profile for buy/write.
The banker-treasury oligopoly induced rally was a way to recapitalize the banks. So far so good. As banks sell stocks thru furtive means, don't stand their holding the bag.
Nemo, are you sleeping?
BONUSES!!!!
So rich does not like physical silver or gold...he like paper...old school ding bat...just kidding
You guys are too fast, nite all
night all...btw Q1 is 54%+ - so all for now
TAL early download link:
The Watchmen
This "Repayment", is that some sort of trick to let eveyone know that the banks are solvent?
[ Re-post after being "pigged". ]
CR,
Janet Yellen gave a talk that broached three topics of interest:
- The monetary policy transmission mechanism
- Asset price bubbles and monetary policy
- The inflation objective and the zero bound
President's Speech: Closing Panel Presentation (06/05/2009)
Wait, I thought all banks are insolvent.
I guess it's just another conspiracy; back to digging the fraidy hole and stocking up on spam and water and lipitor. /snark
Since money is so fungible and my government is giving my SS money to BofA and other banks, how about I put $90K on my BofA and other cards and not pay it back? Since it is my SS money which will be valueless by the time I get it back 20 years from now or probably not at all, how about I extract it now from the unsecured credit cards I have and use it at today's value since money is so fungible? Sort of like this guy.
YouTube - I'M BACK
So after they pay back their TARP, then pay out some nice bonuses to that awesome talent they just must retain, what happens when they come back for more TARP in the future ?
To be fair, the AIG gentleman at the end of the bar had the bartender put an upside down shot glass in front on the gentleman from Goldman via CDS settlements.
Half-truths, pure ignorance, mingled lies
but doesn't require Rasputin levels of discernment to make out
Zero Hedge: Liesman Tries To Be Convincing, Another Epic Fail Ensues
Hamster Wheel Jobs, Hamster Wheel Jobs, and more Hamster Wheel Jobs. Thank you Wall-Mart.
"Wait, I thought all banks are insolvent."
Insolvent doesn't mean illiquid.
Jonny Lee, ZH best post of the day was the FDIC CRE loan portfolios getting shoveled out at a deep dicscount. The question rermains, will these early adopters of bond packages be shown to be fools for not waiting for uncle sugar to socialize more losses?
I don't get rich's PoV when it comes to physical PMs. I respect his opinions and have gained much insight from them.
However, seeng as to how much paper is moving in this market (e.g. Equities, Bonds, CDS, etc) someone somewhere needs to own actual stuff. Hence physical PM, food storage, or other means of production. Also the silver paper just gets you more paper. Can you get ETFs that would provide returns in CAD or Euros to hedge against the obvious USD risk?
I guess in some way rich may be playing the right hand just shuffling more paper, but eventually rich may have to get his hands "dirty" by actually owning some stuff.
Sigh. I sold my BAC-L position for a small loss @ $360, today it closed at $800, after dipping to $200 in March. 36% dividend yield for a preferred issue, convertible to 20 shares of BAC when the price goes over $60. Whoever owns that is set for life apparently.
someone somewhere needs to own actual stuff
GLD has their own vault full o' gold, Scrooge McDuck style. So does SLV.
FDIC CRE dump was amusing.
Macke punks Kneale; "going to talk to you like a child, nod if you understand"
Kirk's Market Thoughts: Jeff Macke Meltdown with CNBC's Dennis Kneale
So you say or their accountant/auditor say.
What does that paper give you? Dividends? Can you exchange your ownership for part of the stash?
Rich talked about people needing physical PM to co we shorts if the market moves in the wrong direction. You catch the movement and how does the ETF earn money to pay you when you cash out? Liquidate some of it's holdings?
I may misunderstand the functioning of these funds but don't understand physical PM hostility rich was portraying either.
If the banks pay back the TARP money, what the hell are they going to use to prop up the stock market? Jeezum, do Ben and Timmy ever think this stuff through?
You catch the movement and how does the ETF earn money to pay you when you cash out? Liquidate some of it's holdings?
yes. They add & liquidate their holdings:
The Mess That Greenspan Made: Finally, an addition to the GLD inventory
To someone that doesn't know anything about the markets, this does not make sense and I'm not taking it down my ..... .
If the banks pay back the TARP money, what the hell are they going to use to prop up the stock market
Follow the money . . . treasury gets more ammo to buy MBS . . .
but don't understand physical PM hostility rich was portraying either.
Kinda tough moving large amounts of physical bullion to a buyer unless you got it in Fort Knox, isn't it?
Count me in the group that if we're down to having to dig out the bullion to function in this economy, Pb is going to be the PM of choice.
Comrade Alexei Mikhailovich said:
Wait, I thought all banks are insolvent.
Bank Profits From Accounting Rules Masking Looming Loan Losses
Bank Profits From Accounting Rules Masking Looming Loan Losses - Bloomberg.com
You don't think their creative accounting will catch up before their earnings do?
Video - CNBC.com
Jeff Macke crackup rehearsal
Didn't understand what Rich was saying about a short squeeze in Silver.
Anyone know why there would be a short squeeze?
Ultimately I think it is more about faith and trust in the system then paper v physical.
While I can say that it makes sense on paper, I'm assuming it is going through the COMEX which I think of a fixed game that makes the stock market look fair and balanced. Also, the paper doesn't take into account currency risk which is becoming a problem for the American investor.
In the end rich may well be more right than barley, but I would think that there can be peace ofmind owning a gold coin over GLD. Just depends on how much yield you're chasing.
GLD has their own vault full o' gold, Scrooge McDuck style. So does SLV.
No 3rd party is counting it
Barley wasn't owning Fort Knox amounts of silver. If you can curl 40lb barbells, I don't see how carrying that much silver is going to be any tougher.
Live & Let Live it seems. SLV will work til it doesn't. Physical silver will always work but may not be the most efficent. Good times.
If no one is auditing their records, is it just blind faith thatthey have what they say they have? Is it the "find the greater fool" function that the commentariat has railed against?
Again why rant against someone wanting physical PM when the other side's position is just blind faith and trust? Is that where we are heading in this recession?
OT: I officially hate typing on an iPhone. The auto-correcting function is driving me nuts!
@squid: they are selling contracts for AG that they don't own. When they are "squeezed", they have to honor the contract when causes the spikes rich alluded to because they are buying up silver on the spot market which drives prices up (I belief I have it right. )
What kind of quantities are being shorted?
"Pb is going to be the PM of choice."
sorry, still a DBB hater... too sensitive to actual industrial activity - which is in year 2 of a 25 year decline
At least >1k ounces. Probably 5k, 10k, and larger lots.
So they gave out $600 Billion plus two trillion in guarantees, and now we're supposed to be impressed that these guys are going to repay $63 Billion?
That's only 50 cents on the dollar recovery for the AIG pass-throughs alone, forget about the rest of it.
Silver really is kind of a stupid play IMO. Easily the least attractive of the 4 PMs IMO.
Anyway, if Ag producers are "shorting" the silver, isn't that the same thing as forward selling their production? There would be no squeeze.
Many AG sellers aren't AG producers. They can be apectulators, investors, and other entities. Again a lot of it is paper/liability pushing. Taking ownership of actual PM can be frowned upon by the COMEX if blog stories I've read are true (unless you are a manufacturer)
As for Silver PM being a bad bet, we'll see. Some people probably can't afford gold or platinum and want some kind of PM in their portfolio.
Comrade Troyski,
I think AZ_Cowboy was referring to the rumor that's been circulating for some time that the money-center banks have been purchasing equity index futures on behalf of the Federal Reserve (since it is not allowed to own stock directly) to prop the markets.
Supposedly the rally since March has been on the back of very thin volume, little large investor participation, and driven by the most purchases of the cheapest (and worst) stocks.
If these "colluding" banks are no longer beholden to the Treasury, the hypothesis may be that they will no longer front for the Federal Reserve.
I haven't the faintest idea if there is a shred of truth in any of this. I'm just speculating about insinuations!
not quite that straightforward - it is a byproduct in many mining cases.
i think rich is fundamentally correct in terms of paper silver being a short magnet and that this is unconnected to anything which has to do with shovels - i just like gold and the pgms more
"since it is not allowed to own stock directly"
um, all of those niceties went out the window when the bear stearns deal went down...
you think that trillion-and-a-half balance sheet at the nyfed is nothing but straight treasuries printed on nicely embossed vellum?
i'm sure that timmay and friends own plenty of barely-in-the-money SPY action, and all manner of variants... and pumping up the 401Ks and IRAs of hardworking americans on the banks of nasty cave-dwelling shorts is a noble endeavor - I just shudder at the thought of the blowback
yagij - what's the motivation for these "speculators, investors, and other entities" to be short?
I think rich was talking about ease of disposal only. Chai mai?
Hymns for the lord has it right. Look at the last few week end of the day bulk futures buying.
GLD/SLV also lend out shares to be shorted. This makes no sense if it is a peg to PM's. Closer to managed futures.
gold is best currency reserve. IMO platinum is too closely related to auto production and silver is somewhere in between.
(@nades - does that mean "would you like tea?")
nades - rich was talking about ease of disposal, but he seemed interested because of a coming "short squeeze spike."
I cannot figure out why there would be a "short squeeze spike" in silver (as opposed to, say, orange juice futures)
Any light you can shed is appreciated. Thx
LOL! Yep, chai means wood, silk, burn, tea, and "like that".
Well pretend I got the accent right!
/dup
As for his reasoning hummm. I didn't get it but that doesn't mean it didn't make sense
You've exhausted my chinese vocabulary!!
"what's the motivation "
the same reason that fools like I can't resist FAZ... because it is there, and because it seems like the exceptionally weak sister in a world where business conditions matter - a perception which ironically feeds action to the upside
Well, I did some googling for "silver short squeeze" and it sounds like the typical PM ravings... Articles going back years saying "There's a silver short squeeze RIGHT NOW!! Load up now for fast profits!"
But I can't find an identifiable party that is short, or why they are/ will be in trouble because they're not hedged and filthy rich and filthy stupid or what the heck the motivation is for believing in an inevitable "short squeeze in silver"...
If rich isn't here to explain what rich was talking about, why should anyone else bother trying to figure out what rich was talking about?
Seriously.
A guy comes on, makes a statement and is gone. That hardly qualifies as a conversation.
I explained it - silver seems like the silliest corner of the commodities play, so attracts shorts - much like homebuilders or banks attract shorts in the equities arena, because both are so obviously sitting on crap balance sheets until the cows come home...
hence the squeeze and resultant spike
Seems reasonable. It has little utility right?
Nytol!
Sorry missed the Chrysler discussion. I'm no expert in BK law but I'm a gamblin' man.
$50 tip to Hoocoodanode says the Supreme Court substantially modifies or overturns Judge Gonzalez's ruling allowing sale to Fiat.
Scalia, Roberts, Alito and Thomas will say the Gubmint is overreaching, and Breyer, Ginsburg, and Stevens will say retirees are getting screwed. Kennedy and Souter could go either way, but it won't matter.
There is no reason to restrict the reserve currency's backing to one precious metal, it can be a basket of all tangible commodities: precious, fungible, or otherwise. What if some new industrial use for glod is discovered?
one currency writes: "$50 tip to Hoocoodanode says the Supreme Court substantially modifies or overturns Judge Gonzalez's ruling allowing sale to Fiat."
this will never reach the supremes
The fix is in. The deal is done. And we been done to a turn.
"homebuilders or banks attract shorts in the equities arena, because both are so obviously sitting on crap balance sheets until the cows come home..."
I have no idea if this is sarcasm, but I'll be short until the cows come home or I go bust. Treasury yields will rise until enough are sold. The money will be printed or taxed if necessary. Easier to squeeze a bank lending long than a speculator selling short.
WSJ:
"However, U.S. Circuit Judge Dennis Jacobs, in announcing the ruling, said a stay of the sale order would remain in place until 4 p.m. EDT Monday or until the U.S. Supreme Court issues its own stay."
Is that a bet Vike?
yog: I don't gamble, I'm in the advertising business.
The stay will expire 4 PM EDT Monday. Who's going to rouse one of the nine to issue a stay. One would need to find a sympathetic justice (you listed the likelys), said justice would need to tuck his night shirt into his trousers, get driven to the office and prep the necessaries.
Scalia: Prolly not. He's saving all his love for the internal friction heading his way.
Roberts: The Chief? I don't think he'll risk it.
Alito: Nice man. Would fish eye Thomas and Scalia for direction. Scalia would shrug. Thomas would look away and say something profound like "um, umm, umm"
Thomas: What has he done lately?
Well, I'm not counting out rescission on appeal after Monday. Souter is retiring. Why not go out with a nod to fellow retirees?
You can name your own charity (but the auto-reload is worth support).
Souter? Well, such a private man. Who really knows who he is, or what drives him... Still, the tendency of any who has risen to a pinnacle is to avoid risk. Better to go away than go away after leaving a shit on the conference table.
I don't think there will be much internal friction unless they find some Swiss account with Thomas' name, or Alito or Roberts signed off on torture (?). Kennedy and Scalia are only 72. Of course, as FDR and Spinal Tap suggested, we could go to 11.
This could be the right case for them to remind Obama and Congress there is a third branch, controlled by the opposition, and "absolute priority" has a clear meaning. It's not like they're forcing 12 year-olds to work in sweatshops for Chinese wages against the New Deal, the appellant is a pension fund.
WRT GLD,
Page not found- msnbc.com
discloses that the Paulson hedge fund manager guy who made $4B in spiffs shorting CDOs has 30% of his funds' monies in GLD.
re-post, NYT today:
"It was called the “Homeland Investment Act,” and was sold to Congress as a way to spur investment in America, building plants, increasing research and development and creating jobs. It gave international companies a large one-time tax break on overseas profits, but only if the money was used for specified investments in the United States.
The law specifically said the money could not be used to raise dividends or to repurchase shares.
Now the most detailed analysis of what actually happened — using confidential government data as well as corporate reports — has estimated what happened to the $299 billion companies brought back from foreign subsidiaries. About 92 percent of it went to shareholders, mostly in the form of increased share buybacks and the rest through increased dividends."
Trickle down piss.
"The study, titled “Watch What I Do, Not What I Say: The Unintended Consequences of the Homeland Investment Act,” was released this week by the National Bureau of Economic Research. It was written by Dhammika Dharmapala, a law professor at the University of Illinois; C. Fritz Foley, an associate professor of finance at Harvard Business School; and Kristin J. Forbes, a professor of economics at the Massachusetts Institute of Technology who was a member of the president’s council of economic advisers from 2003 to 2005."
...
"In lobbying for the new act in 2003, a group of companies and trade associations formed the Homeland Investment Coalition and forecast that passage would help the American economy by “increasing domestic investment in plant, equipment, R.& D. and job creation.” The title of the new study reflects its findings that none of that happened.
“The restrictions on how the money will be spent seem to have been completely ineffective,” Ms. Forbes said in an interview this week."
BAC takes cue from GS:
"The new [BAC] directors, among them ex-Federal Reserve Board Governor Susan Bies and Donald Powell, former chairman of the Federal Deposit Insurance Corp.,..."
Oh please oh please oh please why can't you take Timmy.
yog: give it up. Not gonna happen. Nobody cares, i.e. no constituency to get behind such. The internal friction referenced has to do with the nominee. I can't wait for the rumors about Scalia making plateful after plateful of tiny Latina meatballs. And NOBODY (emphasis added) will attempt to pack the court. Nobody.
From the little I know of Sotomayor, she will not be intimidated by Scalia, one of 6 Roman Catholics including her.
I have no strong feelings about this case, I just feel power politics dictates a swipe at Obama, if not here then soon.
Byzantine Ruins
ROLLINS: Lifetime guarantee?
BILL: Who's lifetime? Not mine! I haven't that much time left. Let's make it yours. Everybody's got a longer life than me!
where did that quote come from? You're not an old Black Fan are you?
Rentenmark
Currency introduced in Germany at the end of 1923 by the president of the Reichsbank, Hjalmar Schacht (1877–1970), to replace old Reichsmarks which had been rendered worthless by inflation.
As Germany had no appreciable gold reserves, the currency was guaranteed against the assets of the country, namely land and railways. Schacht's success in stabilizing the currency was largely due to the population's willingness to trust the new Rentenmark.
In November 1923, the government issued the so-called Rentenmark. The previous currency could be exchanged at a rate of 1 trillion marks for 1 Rentenmark. Inflation quickly stopped. People spoke of the "miracle of the Rentenmark." But the truth is that it wiped out the savings and investments of large swaths of the German middle class as well as wealthy people who had been forced to finance the war by buying government bonds that had now been rendered worthless.
Rentenmark - Google Search
.
.
.
This is an example of an asset backed currency from history and this is what is happening here, now.
What I am saying about an asset backed dollar sounds crazy because people do not wish to believe what is staring them right in the face, screaming to be noticed.
Protect your families and your savings. This is real. This is now. Make defensive moves into land, physical PM, and foreign bank accounts. The S&P can go to 100,000. The German stock market rose from 21,400 in January to 26,890,000 in November at the peak in 1922.
Here are some graphs of the Weimar Republic runup leading to the rentenmark.
Weimar
The ostriches will not catch on until after hyperinflation has already occurred. The herd is gathering and beginning to sing the same chorus, soon they will stampede.
where the heck is EHP...
if you're out there did you catch that story about Myanmar and their natural gas deals
with China and Thailand.... like I've said all along in the words of MC Hammer... 'you can't touch this!'
I have had many impassioned discussions including sending a few letters to Mitch McConnell
about the futility of trade sanctions against Myanmar... they won't work
anyone care to point me to a country where trade sanctions actually were effective? South Africa... after the Sullivan principles
US companies could keep on keepin' on ...no?
"The introduction of the Rentenmark was highly significant, it allowed the currency to stabilise and supported by the Dawes Plan it stood a good chance of not succumbing to inflationary pressures as had previously happened. The new Rentenmark was valued at 1 Rentenmark to One Trillion old marks (no typographical error there). The Rentenmark was exchangeable for bonds in land and industrial plant – in other words they were worth something. Inflation ceased to be a problem, the German people accepted the value of the new currency and businesses accepted it as being of worth."
The Rentenmark
Otishertz,
a lot has been said about Hitler's rise to power and how he was able to turn the economy around... yet no one had talked about his bartering arrangements
bwt Germany and mainly S. American companies, in essence a barter bank was set up, bypassing the need for gold transfers....
What's striking is that Hitler's rentenmark (Edit: not hitler's rentenmark, which came later - thanks Volker) was backed by and redeemable in land and business bonds.
Sound familiar?
(MBS, CMBS)
The Fed is loading up on land and business bonds.
great OtisHertz....
question is on whose land was it based? Germany or the super sized Germany?
It wasn't 'Hitler's Rentenmark'.
OH
Hitler's rentenmark was backed by and redeemable in land bonds... Hitler - I've got some bonds for you backed by and redeemable in land of the Sudetenland...
it's the fine print that will kill you...
curious legal question... if I bought such rentenmark's and they were based on occupied land would I be guilty of violating the Geneva Convention?
ETF's are scams to divert real buying and selling and ease the pressure on the mmanipulators. Wait and see. You can mark my words.
Pull up a 5 year chart of FAZ.
FINANCIAL BEAR 3XNEW ETF Chart - Yahoo! Finance
GLD and SLV are scams pure and simple. They only do a statistical sample count and it is not done independently.
Why buy "gold" if you are too lazy to hold it in your hand?
odd how this blog seems to be so North American centric since it deals with one of the key markets... why do I feel I'm the only one on the opposite of the dateline who is paying any attention, perhaps I should focus my energies on China and leave America well enough alone...
perhaps all the talk of RE & CRE in a very localized way is a turn for people on the other shores, no?
uh, dude, FAZ is a TRIPLE leveraged product with daily investments to track the index. It's supposed to go to zero.
"It's supposed to go to zero. "
Yes, I know. That is what I am saying, dude.
Just pointing it out for anyone who thinks FAZ or other dubious ETFs are good investments or even good speculations.
Volker, you are right. It wasn't Hitler's rentenmark. I am learning about it tonight for the first time.
When I first read this message, I thought it was one of the haikus tha occasionally pop up on CR threads. I still do!
Maybe the banks need to repay the TARP money so the Treasury can funnel the money (by some circuitous route) into its bond auctions next week.
EHP kind of fell of the grid a week ago, after his projection on 3rd flight to safety and drop in oil turned inaccurate.
From Fiat Money Inflation in France
, their currency was backed by land. Then they kept printing up more money. Apparently everyone's land was worth more.
for me, over the last 10 months EHP has been a great source of information, usually doing the work of any given dozen here on an
average day... so what he made a few bad forecasts... unless you are trading off his research notes? give me a few names
who have been flawless? mp and his Peter Pan make believe friend? bond crash clock? depression clock?
take Goldman Sachs, when I worked at Solly they were the only firm I would jump ship for (almost went to Drexel.... )
yet here there is a visceral hatred of that firm... aren't we supposed to be dispassionate when discussing finance and economics?
somedays I feel like I'm reading the Daily Kos.... I have a bad feeling that whereas many commentators were on the money in '07 and '08
they might now be wrong....
Interesting link, RATM.
The land they used to back that money was confiscated from the church.
About Hitler and the rentenmark.
"The dramatic difference in the results of Germany’s two money-printing experiments was a direct result of the uses to which the money was put. Price inflation results when “demand” (money) increases more than “supply” (goods and services), driving prices up; and in the experiment of the 1930s, new money was created for the purpose of funding productivity, so supply and demand increased together and prices remained stable. Hitler said, “For every mark issued, we required the equivalent of a mark’s worth of work done, or goods produced.” In the hyperinflationary disaster of 1923, on the other hand, money was printed merely to pay off speculators, causing demand to shoot up while supply remained fixed. The result was not just inflation but hyperinflation, since the speculation went wild, triggering rampant tulip-bubble-style mania and panic. "
The Weimar Hyperinflation? Could it Happen Again?
Duke, it is probably easier to be dispassionate from Asia. GS is robbing every man woman and child in this country. Of course those of us who are paying attention take it a little personally.
I agree about EHP. He has contributed a great deal of worthwhile information. I gave him some crap about giving government statisticians the benefit of the doubt and still feel bad about it. At least he has the guts to make specific predictions.
The jury is still out on the direction of oil and the market but I gotta say it is looking Hyper to me. Things can still crash before they go Hyper and there is a good chance of this happening.
There is no point in trying to time the optimum buy if you think Hyper is an eventuality. In this scenario, two times current prices would still be cheaper than to where they ultimately would rise.
Timmyone,
This part sounds familiar,
"In the hyperinflationary disaster of 1923, on the other hand, money was printed merely to pay off speculators."
The Fed has printed trillions to buy up the suicide banker's bad bets.
Thanks for the link.
Especially the "In the hyperinflationary disaster of 1923, on the other hand, money was printed merely to pay off speculators, causing demand to shoot up while supply remained fixed.". Exactly the same thing is happening in the USA....
Destruction of dollars = stronger US Dollar?
Otishertz: exactly
I'd guess EHP is a little busy now,...he does have a life you know (and I'm guessing wife and kid.) I don't think his ego is wedded to his predictions and he'd just admit a few blown calls.
OT
How does IAU differ from GLD or are they essentially the same? Does anyone know the reason that GLD is fequently mentioned and cited by not IAU? Thank you
nincompoop,
Just buy real gold if that is what you want. Margin greed kills.
Hyperinflation also needs the supply side and especially the logistic system to fail at least partly. Zimbabwe: white farmers were driven off their land, resulting scarcity of food in markets and retaliation from IMF in economic terms also contributed to the hyperinflation.
Weimar: More or less chaotic situation after WWI across Germany and in neighbouring countries for years, "low intensity" street warfare between different extremists (especially between communists and nazis) happened regularly there.
I think "low intensity" street warfare and 30% unemployment probably are highly correlated. We are going to 30% real unemployment real soon.
otishertz ,
We have no real historic parallel for this event.. just like there was no real historic parallel for GD1. That is one peculiar property of almost all emergent systems... the direction and nature of evolution is hard to predict.
Lucifer do you have a link for a good primer on emergent systems?
otishertz,
I can give you three easy to understand examples of emergent systems.
1] Changes in the abilities of the human brain starting from birth. (think of language acquisition or locomotion.. kids don't talk a lot for almost 2-3 years and then..)
2] Biological evolution (it took almost 4 billion years to get multicellular organisms as we know them today, but much less to get further development which was unpredictable to say the least)
3] Human civilization (always increases in complexity and ability, but not linear or even predictable)
or try
Emergence - Wikipedia, the free encyclopedia
//Lucifer do you have a link for a good primer on emergent systems?//
Emergent systems of any significant complexity cannot be deconstructed into functional components.. they either evolve further or die.
I get how you are saying there are abrupt changes but I am not sure how something you define as either evolving or dying cannot be predicted. Suddenness is relative.
Gd mng mary-nam.
Hmmm, TARP terms. Whatever. Not much money in play that can't be gamed. Repayment looks like a diversion.
Here's another great loophole - anyone see the part where you can drive a Mack through?:
All news | Hedgeweek
C
"Emergent systems of any significant complexity cannot be deconstructed into functional components.. they either evolve further or die."
If the global financial system is an emergent system, when one functional component dies does the whole system die?
Or are you saying if the system dies no components survive.
I think in lieu of buying bananas and oranges at the supermarket, a certain percentage of you could be persuaded to buy BNA & ORG ETF's instead.
More fun on the 10-year bond ramp. Looking good for the bull's entry to the china shop on Wednesday:
The Market Ticker
And, of course, KD casts aspersions on the bona fides of bank balance sheets, toxics, accounting, FDIC et al.
C
Let's do some forensic accounting and have every financial firm that received AIG money pay it back before they ever pay a bonus again! All $180 billion of it!
I'm willing to bet that the list of big banks lining up to pay back the TARP is the same list as the biggest AIG recipients.
This is the biggest swindle in history.
I wonder what GLD would say if I wrote them an e-mail telling them I would like to redeem some shares for gold.
The first Golden-Parachutes are now descending down upon drop zones in occupied Finance.
Operation Overloan
D*-Day
Something you 3-Letter-Monte metal etf players & mining stock enthusiasts just might want to consider...
Your plays are strictly in dollars, as thats what the stock is denominated in, right?
Angry Saver - the good news on the forensics is that numerals are common to the US and EU. For the accounting notes you'll need French, German, Spanish, and misc nordic languages.
It's not just the US TARP-eligible.
C
Though it is small consolation, I am pleased to see multiple mentions today and yesterday of both the the WSJ using an "operating earnings" PE of 15 and of the real SP500 PE being 130 on ZH, Market Ticker, and random comments on youtube.
Reality can escape.
Wow, Denninger also said, "No banker left behind."
That was my multiple comment on the stress test.
I'm glad he took it up. Awesome.
Bullgasm? Watch The Birdie! - The Market Ticker
(In Godwin we trust)
Imagine how hard the propaganda machines worked in 1944-45 Germany to convince the True Believers that all was well, despite all evidence to the contrary?
Otis
Margin greed kills. (truer words were never spoken)
otishertz (profile) wrote on Sat, 6/6/2009 - 8:02 am replyIgnore userI wonder what GLD would say if I wrote them an e-mail telling them I would like to redeem some shares for gold.
They would require you to become an authorized participant and deliver some multiple of a creation unit share quantity to them. Many ETF's are created and redeemed in 50,000 share lots. You deliver 50,000 shares of the ETF to the fund and get back the equivalent value in commodities, stocks, bonds and other securities held by the fund.
There are no doubt many scams in the world of finance - Madoff, et al - ETF's aren't one of them. The structure is better on many levels than that of a regular mutual fund and has given many investors access to strategies and asset classes that previously were the domain of the wealthy.
One thing I didn't like about GLD is that it's taxable at the collectibles rate = your marginal rate. No big deal if it's in your IRA, but that means it's a suboptimal buy-and-hold vehicle.
No positions right now... all these positions I'd been building since, like December of last year, gone to a trailing stop on Wednesday. That looked wrong on Thursday, but right again on Friday. You just never know in this market... every day is an independent dice throw. Sad to see them go, some real winners in there. I moved my stops up because, just gut feel that the dollar would make a stand here, too many people leaning against it.
To me, PMs are gappy, hard to trade. You also have to be continuously aware that you're trading beside a contingent of true believers.
I'm sorta neutral on the physical vs. paper debate, have some physical, not much in dollar terms. If you're going to go that route, my experience from the 70s, when I was serious about it, is that numismatic coins with any scarcity whatsoever outperform bullion. But, yeah, anything with any scarcity is not something you will be able to monetize with a button click, perhaps only on EBay.
It's a given to me that government would outlaw ownership of PMs before it would let them become circulating currency.
Another essay on TNX, bit more hedged, still refs bears prowling:
Stock and Bond Market Update :: The Market Oracle :: Financial Markets Analysis & Forecasting Free Website
There's something hypnotic about watching a large phenomenon looking like it's approaching tipping point.
Glorious.
YouTube - Glorious -- the Breeders
C
Counterpointer,
I'm well aware that foreign banks received a pile of AIG dough. Barclays, Deutsch Bank and UBS all received windfalls.
I see no reason why the AIG monies should not be clawed back. We can even work out a payment schedule, with interest of course.
I might file multiple suits as a taxpayer. If nothing else it will draw attention to the sham. My worry is that the media won't cover the issue. The MSM doesn't report news anymore, only propaganda.
3-Lettered-Monte = ETF
Angry Saver - wasn't suggesting for a moment that you weren't aware of the money trail. I wouldn't call them windfalls, however. More like everyone who was shoulder to shoulder around the roulette wheel all got paid out as part of house rules.
C
Not all ETFs are FAZ (I like GLD and SLV)
FAZ is a vapor-blowing game. Which, under the proper circumstances can be fun.
If you stay in for more than a day in FAS or FAS you are gambling in my book, if you stay in longer than a week or more you can't read a chart. But if I thought SLV was a good buy at 10 why not? 50% in a few months?
I agree with your point about diverting money from real buying but I think it's a side effect which TPTB are happy about and will probably 'need' to use.
The house is gonna win on this one.
Well, if you or your broker is an authorized participant by GLD, you can redeem 100,000 shares for physical delivery of gold.
My experience, DGP trades pretty well.
Also, my experience in a couple of decades of trading... miners, for whatever reason, tend to have outsized option premia. You can often work out a good risk-reward profile for buy/write.
The banker-treasury oligopoly induced rally was a way to recapitalize the banks. So far so good. As banks sell stocks thru furtive means, don't stand their holding the bag.
What ever happened to the other $650 billion?